Mathematics for FinanceMTP Oct 22Question 1342 of 512
All Questions

A Maruti Zen cost 3,60,000\displaystyle 3,60,000. Its price depreciates at the rate of 10%\displaystyle 10\% p.a. during the first two years and at the rate of 20%\displaystyle 20\% in third year. Also find the total depreciation.

Options

A1,26,720\displaystyle 1,26,720
B1,15,620\displaystyle 1,15,620
C1,25,000\displaystyle 1,25,000
D1,10,520\displaystyle 1,10,520
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option a — 1,26,720\displaystyle 1,26,720

All Options:

  • A1,26,720\displaystyle 1,26,720
  • B1,15,620\displaystyle 1,15,620
  • C1,25,000\displaystyle 1,25,000
  • D1,10,520\displaystyle 1,10,520

Detailed Solution & Explanation

**Derivation of Total Depreciation** Given: - Initial Cost (V0\displaystyle V_0) = Rs. 3,60,000\displaystyle \text{Rs. }3,60,000 - Depreciation rate for first two years (d1\displaystyle d_1) = 10%\displaystyle 10\% p.a. - Depreciation rate for third year (d2\displaystyle d_2) = 20%\displaystyle 20\% p.a. **Step 1: Calculate the depreciated value after 2 years (V2\displaystyle V_2)** V2=V0(1−d1)2V_2 = V_0(1 - d_1)^2 V2=360000(1−0.10)2V_2 = 360000(1 - 0.10)^2 V2=360000(0.9)2V_2 = 360000(0.9)^2 V2=360000×0.81=Rs. 2,91,600V_2 = 360000 \times 0.81 = \text{Rs. }2,91,600 **Step 2: Calculate the depreciated value after 3 years (V3\displaystyle V_3)** V3=V2(1−d2)V_3 = V_2(1 - d_2) V3=291600(1−0.20)V_3 = 291600(1 - 0.20) V3=291600×0.80=Rs. 2,33,280V_3 = 291600 \times 0.80 = \text{Rs. }2,33,280 **Step 3: Calculate the total depreciation amount** Total Depreciation=V0−V3\text{Total Depreciation} = V_0 - V_3 Total Depreciation=360000−233280=Rs. 1,26,720\text{Total Depreciation} = 360000 - 233280 = \text{Rs. }1,26,720 Hence, **Option A** is the correct answer.

Key Concepts to Understand

Depreciation

Allocation of the cost of a tangible fixed asset over its useful life due to wear and tear, efflux of time, or obsolescence.

More Questions from Mathematics for Finance

A sum of money invested in compounded interest doubles itself in four years. In how many years it becomes 32 times of itself as the same rate of compound interest?

The simple interest on 600\displaystyle 600 for 9 months is 27\displaystyle 27. Find the interest rate.

Miss Liza lent 4,000\displaystyle 4,000 in such a way that some amount was given to Mr. A at 3%\displaystyle 3\% p.a. S.I. and rest amount to was given to B at 5%\displaystyle 5\% p.a. S.I., the annual interest from both is 144\displaystyle 144. Find the amount lent to Mr. A.

A certain sum of money was put at S.I. for 2.5\displaystyle 2.5 years at a certain rate of S.I. p.a. Had it been put at 4%\displaystyle 4\% higher rate, it would have fetched 500\displaystyle 500 more. Find the sum of money.

Rs.1,25,000\displaystyle 1,25,000 is borrowed at compound interest at the rate of 2%\displaystyle 2\% for the 1st year, 3%\displaystyle 3\% for the second year and 4%\displaystyle 4\% for the 3rd year. Find the amount to be paid after 3 years.

If Rs. 1,000\displaystyle \text{Rs. }1,000 be invested at interest rate of 5%\displaystyle 5\% and the interest be added to the principal every 10\displaystyle 10 years, then the number in years in which it will amount to Rs. 2,000\displaystyle \text{Rs. }2,000 is:

Ready to Master Mathematics for Finance?

Practice all 512 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free